Sunday, 14 August 2011

How shocking it was to see those pictures on TV of rioting, looters helping themselves to trainers, plasma screens and mobile phones: brazenly walking into shops and clearing the shelves of more goods than they could carry. How shocking it must have been for marketers in particular. Haven’t we been telling our clients about the declines in materialism in favour of experiences; how there is an accelerated trend in people buying on the basis of ‘values’ as much as ‘value’: and how people are redefining what makes them happy by making more mindful purchases as they start to live with less and adopt a back-to-basics mindset. Well the events of last week seem to have punctured that theory.

What I saw was something closer to what has been described as ‘shopping with violence’ by groups of people who felt it their right to acquire as much as they could to get something for nothing. Some of the looters when interviewed on Radio 4 admitted that they didn’t need trainers themselves they were just taking the chance to get something for free.

But is it any surprise to us that our society has spawned a certain group who feel it is their right to acquire things for free? For how long have we been peddling the ‘magic of free’? From entering a free draw; enjoying a free drink; downloading content for free; and reading our news for free, to free interest rates, and even free housing. Is it any wonder that if you push the concept of free so far, that not only do you end up with freesumers….but freeloaders?

Now, of course, the reasons behind the riots are truly complex and don’t lie in just one area, but the contributing factor made by the marketing of ‘free’ is one element that has been strangely overlooked by the media, preferring to dwell on the political subject of ‘cuts’ than on the economic subject of ‘costs’. But this was a riot cultivated by a culture of acquisition, not of austerity. The evidence is right there before us in the TV pictures of looters: people who have been described as ‘mindless’, who value nothing but their ability to acquire what is not theirs to take. If this is about politics, it is about the politics of price.

Because if you tell people over a long enough period of time that the things they most desire can be acquired for free, you are eroding the very frameworks for understanding value. We can theorise about the post-recessionary changes that are taking place in the ‘value exchange’ but the unkind truth is that in a market where everything is free, there IS no value exchange.

Many a psychological study has been recorded on the effects of presenting products as ‘free’. Perhaps some of the best by Kristina Shampan’er and Dan Ariely’: ‘How small is zero price? The true value of free products’ in which they show that ‘zero cost’ encourages people to act in a much more irrational manner than if they had to weigh up the opportunity costs of something that came with a price tag.

Interestingly, the digital noughties (which perhaps we should now rename the ‘freebies’) could perhaps be held partly accountable for the ‘mindless mindset’ that fuelled some of last week’s events. When Clay Shirky paraphrases Szabo and others who have written on the idea of ‘mental transaction costs’ (the energy required to weigh up what the cost of something might be) he comes to the conclusion that: “The only business model that delivers money from sender to receiver with no mental transaction costs is theft” – or if you like, something that you don’t own but that you can take for free. In the digital world we have an expectation of ‘free’; and as the digital world and the physical world become one and the same thing, can we really be surprised when people have rising expectations that what they want should be free?

Looting online has been going on for ages, and as a society we have been happy to overlook it. But who pays for the data required to freely enjoy a Youtube clip on an iPhone? Who pays to play Farmville; who pays for the ability to send messages via BBM? The answer seems quite clear now: we all pay.

Free has been used as a mass distribution mechanic. And those looters last week felt that some non-digital distribution should be coming their way. This is not at all to excuse that repugnant behaviour, but it is to raise the possibility that in a world of free, where acquisition is presented as having no consequence, that requires no thought – where no one pays, so there is no cost - we are raising not a generation of free-thinkers, but a generation of non-thinkers.

A generation who do not have to calculate risk and reward. A generation that has grown up with free information, free publishing and free distribution at the heart of many of the products it now consumers. Chris Anderson wrote eloquently and convincingly about the new internet-fuelled freemium models, promising us that £0.00 would be the future of business, and that for businesses to survive they should become two-sided and learn to cross-subsidise. This is all true. But it does of course rely on ‘hiding’ the true cost of something that people might believe themselves to be getting for free.

And here’s the rub: years ago, many of the Platonic philosophers, as Ariely points out, were very suspicious of zero: because zero was seen as ‘void’, and since that was a concept that was impossible, neither was zero possible. As marketers, we have used free to mean zero, and the truth is that it is just not possible. Nothing is ever truly free, nor should something we want people to truly value, be flogged as free. We must redefine free as part of a trade, and not as zero. Like freedom itself, ‘free’ is not a right; but a responsibility. As such, it always comes with consequences and we must be responsible enough to spell those out.